Snapchat founder and CEO Evan Spiegel attends a session during the Viva Technology show in Paris on June 17, 2022.
Eric Piermont | AFP | Getty Images
- Earnings per share: $0.14, adjusted, versus $0.11 expected, according to a Refinitiv survey of analysts
- Revenue: $1.30 billion versus $1.31 billion expected, according to Refinitiv
- Global Daily Active Users (DAUs): 375 million versus 375.3 million expected, according to StreetAccount
- Average revenue per user: $3.47 versus $3.49 expected, according to StreetAccount
Revenue in the quarter was up slightly a year earlier. Like social media peers Meta and Twitter, Snap had a rough 2022, as a slowing economy led businesses to slash their digital ad budgets and Apple’s iOS privacy update limited targeting capabilities.
In a letter to investors, Snap called it a “challenging year” that was marked by “macroeconomic headwinds, platform policy changes, and increased competition.
For the full year, sales rose 12% to $4.6 billion in 2022. And for a third straight quarter, Snap said it wouldn’t provide guidance for the next period.
“On the monetization side, we anticipate that the operating environment will remain challenging, as we expect the headwinds we have faced over the past year to persist throughout Q1,” the company said in the letter.
It’s an ominous start to fourth-quarter earnings season for ad-supported internet companies. Investors will get a clearer picture of the state of the online ad market later this week. Facebook parent Meta reports fourth-quarter results on Wednesday, followed by Alphabet and Amazon on Thursday.
Meta shares dropped 2% after Snap’s report. Pinterest, which releases results next week, fell almost 5%.
Snap’s stock plummeted 81% last year as the Nasdaq had its worst year since 2008. The stock has recouped some of its losses, rising 29% in January, along with a broader rally in tech.
Snap said it’s refocusing investments to concentrate on growing its community and engagement, accelerating and diversifying its sales growth and developing augmented reality technologies.
The company said its Snapchat+ service now has over 2 million paying subscribers as of the fourth quarter.
As executives told analysts several times last year, the company’s online ad platform was built to be easy to use and to enable brands to quickly launch campaigns. But its simplicity also meant that companies could quickly pause campaigns, severely impacting Snap’s finances.
Snap announced in August it would lay off 20% of its workforce of over 6,000 employees. The company also shelved several projects during the year, including its photo-taking drone and Snap Originals premium shows.